Oil prices rose on Monday, bouncing off early losses as Israeli Prime Minister Benjamin Netanyahu said Israel had proof that "Iran lied" about its nuclear weapons capability, and that he was sure U.S. President Donald Trump would do "the right thing" in reviewing the country`s nuclear deal with western powers.

U.S. West Texas Intermediate (WTI) futures were up 80 cents on the day at $68.90 a barrel.

Earlier in the session, both benchmarks had been down about 1 percent. Both started to gain after Netanyahu said he would soon have an announcement regarding Iran.

"Oil reacted very severely" to Netanyahu`s announcement, said Phil Flynn, analyst at Price Futures Group in Chicago.

Oil prices jumped after Netanyahu said Israel has evidence that Iran lied about its nuclear program after signing the 2015 agreement with global powers.

"Netanyahu may be the flavour of the day, but the larger issue driving this is what will Trump do with Iran? And what will Iran do in response? And that uncertainty is the fundamental driver, not so much Netanyahu," said Walter Zimmerman, chief technical analyst for United-ICAP.

Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after the international agreement.

Oil prices have risen this month to their highest since late 2014, driven by concern over potential disruptions to Iranian crude flows. Analysts said the market is extremely sensitive to any developments on the nuclear deal and sanctions.

"Until May 12, you`re not going to see any significant downward correction," PVM Oil Associates strategist Tamas Varga said. "Reimposing U.S. sanctions is not a foregone conclusion just yet."

U.S. drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest since March 2015, General Electric`s Baker Hughes energy services firm said.

Crude production in the United States has hit a record 10.59 million barrels per day.

In the latest development in the U.S. shale boom, Marathon Petroleum Corp agreed to buy rival Andeavor for more than $23 billion. The largest-ever tie-up between U.S. refiners will give the combined company a nationwide presence and increased access to growing export markets.

The deal gives Marathon more exposure to U.S. shale, thanks to Andeavor`s existing logistics and terminal operations in Texas and North Dakota shale regions.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)